Monday June 17th, 2024 4:41PM

Georgia’s Homeowner Assistance Fund unconstitutionally may discriminate based on race

By Martha Zoller

I talked to my friend, Jen Ohman, from Pacific Legal Foundation and then to Glenn Roper. He had an interesting view on a Georgia policy, so I thought I’d share it:

The Constitution’s Equal Protection Clause forbids state governments from providing benefits or imposing burdens based on an individual’s race. Georgia’s implementation of a recent COVID-relief program violates that mandate. 

The program is known as the Homeowner Assistance Fund, and it was created by Congress last year to promote housing stability and reduce mortgage delinquency and foreclosures. In the wake of the pandemic and the government-mandated shutdowns and financial slowdown that came with it, many homeowners have struggled to pay mortgages, utilities, and other home-related expenses. Georgia was hit especially hard. A 2021 study concluded that Atlanta had the fifth-highest mortgage delinquency rate in the country.  

To help struggling homeowners, the Homeowner Assistance Fund allocated $10 billion among the states to assist with mortgage payments, reducing interest rates, and paying for utilities. Georgia received over $350 million under the program. 

Unfortunately, bureaucrats in both Washington D.C. and Atlanta have chosen to distribute Georgia’s share of the funds in a racially discriminatory way. 

The program requires each state to use at least 60 percent of its allocated funds to assist homeowners with household incomes below the area median income (abbreviated “AMI”). So far, so good. But then, the state must prioritize the remaining funds to “socially disadvantaged individuals,” a term that Congress failed to define. Officials at the U.S. Treasury Department decided that it should be defined by race. They issued a guidance document for states, saying that “socially disadvantaged individuals are those who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group.” Under Treasury’s guidance, blacks, Hispanics, Native Americans, Asian Americans and Pacific Islanders are presumed to be socially disadvantaged. In other words, just about everyone except whites. 

A few months later, Treasury revised its guidance to include race as one of several “indicators of impairment” rather than the sole consideration. But it nonetheless allows—if not requires—states to treat homeowners differently because of skin color. 

Officials in Georgia’s Department of Community Affairs, responsible for managing the Homeowner Assistance Fund in Georgia, readily adopted Treasury’s focus on race, concluding that racial minorities automatically qualify as “socially disadvantaged.” To respond to this supposed “disadvantage,” the Department blatantly discriminates against white homeowners regarding eligibility. A white homeowner can only receive assistance if his household income is below the area average (at or below 100 percent of AMI). But a homeowner who is a racial minority can receive assistance if the household income is up to 150 percent of AMI. To put that in real terms: In Fulton County, a white four-person household can only qualify for assistance if the household income is less than $86,200—but a similarly-sized non-white household can qualify if income is up to $129,300. 

Of course, income limits are only one qualification—homeowners must also have endured financial hardship caused by the pandemic, meaning either a significant loss of income or a significant increase in expenses. And under the revised Treasury guidance, a white homeowner can qualify as “socially disadvantaged” if he lives in a persistent poverty county or a majority-minority census tract (one populated predominantly by racial minorities). 

But a white homeowner who does not live in one of those areas and has an income between 100 percent and 150 percent of AMI is excluded from the program in Georgia. In contrast, non-white homeowners with similar incomes are eligible. 

This is clear unconstitutional racial discrimination. Homeowners who have suffered financial hardship due to COVID should not be rewarded or penalized based on the color of their skin. Unfortunately, federal and Georgia bureaucrats have decided otherwise. And this unconstitutional discrimination will likely continue unless the courts put a stop to it. 
Glenn Roper is an attorney at Pacific Legal Foundation, a nonprofit legal organization that defends Americans’ individual liberty and constitutional rights.

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